Air China (601111): Robust cost control for quality routes

Air China (601111): Robust cost control for quality routes

Event: The company released the third quarter report of 2019, and achieved operating income of 1030 in the first three quarters.

77 ppm, an increase of 0 in ten years.

19%; net profit attributable to mother 67.

62 ppm, a decrease of 2 per year.

53%; net profit deducted from non-mother 65.

56 ppm, an increase of 0 in ten years.


Q3 achieved operating income of 377.

6.4 billion, down 2 every year.

26%; net profit attributable to mother 36.

22 ppm, a ten-year increase4.

43%; net profit of non-return to mother is 35.

36 ppm, a ten-year increase4.


  Guidance on capacity deployment, supply growth indicators, and increased load factor.

The company’s ASK increased by 5 in the first three quarters.

56%, RPK increased by 6.

24%, load factor 81.

40%, an increase of 0.

5 points.

Among them Q3ASK increased by 4.

87%, the capacity growth rate increased further than the first half, RPK growth rate was 5.

57%, with a load factor of 82.

21%, an increase of 0.

54 points.

Except for the maintenance of Beijing Capital Airport Expressway affecting capacity growth, the company’s overall capacity deployment was cautious, and the passenger load factor achieved a small increase in the quarter.

  The growth rate of seat-kilometer revenue, but the improvement of 上海夜网论坛 cost control capabilities, led to the increase in gross profit margin in Q3.

  In terms of revenue quality, due to the weak demand from the industry, the company’s seat-kilometer revenue in the first three quarters decreased by 5%, of which Q3 in the single quarter was nearly 7% in a row.

However, the decline in oil prices in the third quarter led to a decline in the company’s jet fuel costs; the expansion of the company’s non-oil cost control capabilities improved, and Q3’s single quarter gross margin reached 24.

66%, an increase of 1 over the same period last year.

83 units.

In the first three quarters, the gross profit margin increased by one to 19.


  In Q3, the non-net profit of foreign exchange deduction increased by about 8%, and the company’s profitability was strong.

We estimate that the company’s Q3 single-quarter exchange loss was 2 billion, an increase of 100 million US dollars over the same period of the previous year; after deducting exchange losses and non-recurring loss gains, Q3 deducted non-net profit was 60.

31 ppm, a ten-year increase of 8.

43%, the company’s advantages in salary and cost help its expanded profitability.

  Investment suggestion: The company’s card is located in the Capital Airport, the route network is perfect, the civil aviation development fund halves to increase profits, but considering that aviation demand remains to be seen, the oil exchange environment is still uncertain.0.48/0.


61 yuan, PE is 16x, 14x, 13x, downgrade to “overweight” level.

  Risk reminder: Macroeconomic growth significantly, crude oil prices increase sharply, exchange rate fluctuations intensify